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Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals improved significantly. The OPEC Reference Basket (ORB) value rose by $7.51, or 42.5%, m-o-m, to stand at $25.17/b. Crude oil futures prices also bounced back in May, amid renewed optimism on the outlook of global oil market fundamentals and expectations for a further recovery of oil demand and tightening global supply. ICE Brent increased by $5.78, or 21.7%, m-o-m to average $32.41/b, and NYMEX WTI soared by $11.83, or 70.8%, m-o-m to average $28.53/b. The contango structure of oil futures prices flattened considerably over the month in all three markets, suggesting that the supply-demand fundamentals are gradually improving. Hedge funds and other money managers turned more positive about the outlook for crude oil prices and continued to raise their combined futures and options net long positions in both ICE Brent and NYMEX WTI contracts.
World Economy
The world economic growth forecast remains unchanged, declining by 3.4% y-o-y in 2020, following global economic growth of 2.9% in 2019. The major economies’ forecasts remain unchanged this month, except for India. The US is forecast to contract by 5.2% in 2020, following growth of 2.3% in 2019. An even larger decline of 8.0% is expected in the Euro-zone in 2020, compared to growth of 1.2% in 2019. Japan is forecast to contract by 5.1% in 2020, comparing to growth of 0.7% in 2019. China’s 2020 GDP is forecast to grow by 1.3%, following growth of 6.1% in 2019. India’s forecast was revised down to decline by 0.8%, a sharp slowdown from downwardly revised growth of 4.9% in 2019. Brazil’s economy is forecast to contract by 6.0% in 2020, following growth of 1.1% in 2019. Russia’s economy is forecast to contract by 4.5% in 2020, after growth of 1.3% in 2019, not only due to COVID-19, but also because of the considerable decline in oil prices.
World Oil Demand
World oil demand is projected to decrease by 9.1 mb/d in 2020, unchanged from the previous month’s assessment. The COVID-19 pandemic has negatively affected global economic activities, eliminating global oil demand growth potential and leading to a y-o-y decline of 6.4 mb/d in 1Q20 and by 17.3 mb/d y-o-y in 2Q20. Transportation fuels are projected to be under pressure during 2020 as lockdowns in various countries particularly the US, Europe, India and the Middle East reduce demand for gasoline and jet fuel, as air travel and distances travelled anticipated to significantly decline compared with a year earlier. Furthermore, decreased manufacturing activities, compared with the previous year, will limit industrial fuel requirements. Petrochemical feedstock is expected to be driven by slower end-user requirements for plastics and plastic products, compared to previous years. Considering the large uncertainties going forward, new data and developments may warrant further revisions in the near term. For 2019, world oil demand growth is kept unchanged at 0.83 mb/d as OECD oil demand declined by 0.10 mb/d while non-OECD oil demand increased by 0.93 mb/d.
World Oil Supply
Non-OPEC liquids production growth in 2020 (including processing gains) is revised up by 0.3 mb/d from the previous month’s assessment and is now forecast to decline by 3.2 mb/d y-o-y. The revision is based on oil production estimations for April and May in non-OPEC countries participating in Declaration of Cooperation (DoC). Strong conformity with the voluntary production adjustments by the 10 non-OPEC participating countries in the DoC led to a drop in crude oil output of more than 2.59 mb/d in May, while OPEC-10 cut 6.25 mb/d m-o-m. At the same time, preliminary oil production outside the DoC showed a decrease by 2.0 mb/d in April and furthermore by 0.8 mb/d in May, mainly in the US and Canada. Oil supply in 2020 is forecast to show growth only in Norway, Brazil, Guyana and Australia. Non-OPEC liquids production growth in 2019 was revised up by 0.01 mb/d owing to a minor upward revision in Latin America’s production in 4Q19 and is now estimated to have grown by 2.03 mb/d to average 65.03 mb/d for the year. OPEC NGLs are estimated to have declined by 0.08 mb/d y-o-y in 2019 to average 5.26 mb/d, while the preliminary 2020 forecast indicates a decline of 0.03 mb/d to average 5.23 mb/d. OPEC crude oil production in May decreased by 6.30 tb/d m-o-m to average 24.19 mb/d, according to secondary sources.
Product Markets and Refining Operations
Refinery margins globally came under heavy pressure and plummeted to record lows on the back of oil product gluts amid stronger feedstock prices. The middle section of the barrel suffered the most as the manufacturing, freight and distribution systems still operate at reduced rates. Although gasoline markets showed some upside, owing to a gradual recovery in mobility as the pandemic restrictions continue to be eased, this was insufficient to prevent the hard downfall in refining economics.
Tanker Market
Dirty tanker rates in May fell from the high levels seen since mid-March. Production adjustments by OPEC and participating non-OPEC countries, as well as other major producers have eased the pressure seen on demand for VLCCs. A decline in product exports amid COVID-19 lockdowns have also kept clean tanker rates subdued, with both reduced refinery runs and weak product demand limiting cargoes. Floating storage has provided some support to both dirty and clean rates, however, levels are seen to be unwinding faster-than-expected.
Crude and Refined Products Trade
Preliminary data for May shows US crude imports recovering slightly to 6.0 mb/d following the arrival of long-haul volumes from the Middle East. US crude exports remained broadly steady at 3.2 mb/d, although a considerable share was headed to floating storage and oversea inventories. Product exports fell sharply in May, accelerating the decline that started in March, as COVID-19 disruptions constricted product demand in Latin America. After bottoming out at 9.7 mb/d in March, China’s crude imports picked up in April, averaging 9.9 mb/d. Preliminary customs data indicates crude imports hit a new record high of 11.3 mb/d in May. Product exports from China reached a new record high of 2.08 mb/d in April, although tanker tracking data points to a sharp fall in exports in the coming months. India’s crude imports dipped in April to average 4.2 mb/d, impacted by the government-ordered lockdown over the month. India’s product imports experienced a continued decline, weighed down by similar factors, averaging below 1.0 mb/d for the first time this year. India’s product exports edged slightly higher in April, as refiners looked to international markets to drain excessively high inventories.
Commercial Stock Movements
Preliminary April data showed that total OECD commercial oil stocks rose by 107.7 mb m-o-m to stand at 3,069 mb. This is 184 mb higher than the same time one year ago and 140.6 mb above the latest five-year average. Within the components, crude and products stocks rose by 58.1 mb and 49.6 mb m-o-m, respectively. OECD crude stocks stood at 57.9 mb above the latest five-year average, while product stocks exhibited a surplus of 82.6 mb compared to the latest five-year average. In terms of days of forward cover, OECD commercial stocks fell by 4.2 days m-o-m in April to stand at 80.7 days. This is 19.9 days above April 2019, and 18.6 days above the latest five-year average.
Balance of Supply and Demand
Demand for OPEC crude in 2019 is revised down by 0.5 mb/d from the previous assessment, standing at 29.4 mb/d, which is 1.1 mb/d lower than the 2018 level. Demand for OPEC crude in 2020 is also revised down by 0.7 mb/d from the previous month, standing at 23.6 mb/d, which is around 5.8 mb/d lower than in the previous year.
Source: OPEC
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Wednesday, 01 April 20
TRADERS SCRAMBLE TO SELL CHEAP CRUDE CARGOES AS GLUT GROWS - REUTERS
Oil traders across the globe are offering cargoes far in advance as rapidly vanishing demand drives key physical crude prices to multi-decade lows, ...
Wednesday, 01 April 20
MARKET INSIGHT - INTERMODAL
There is an old, allegedly Chinese, saying suggesting that living in “interesting” times usually refers to times of trouble. The latest ...
Tuesday, 31 March 20
FREIGHT MARKET: DRY BULKERS - SPOT MARKET 23-29 MARCH 2020
Capesize
The rebound in freight rates resumed this past week, with rates man-aging to post further gains by week’s end. The BCI is in negat ...
Tuesday, 31 March 20
DRY BULK: Q1 HAS BEEN THE WORST QUARTER NOTED FOR MORE THAN 3 YEARS NOW - ALLIED RESEARCH
At this point, the Covid-19 pandemic seems to be monopolizing all market (as well as all other) discussions across the world and any market insight ...
Tuesday, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.17 points Monday, down 0.43 percent week on week.
The index, released by Chi ...
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- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Australian Coal Association
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
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